September 23, 2012

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Incentives 101

by fnbrinc

Ever since the inception of direct mail marketing, mailers have been using incentives as a way to increase their response rate. The use of incentives (like freebies, give aways, or promotional items) have withstood the test of time because they work.

The following are three of the more popular ways to use incentives to increase your response rate and sales.

Incentives can be used to generate demand. For example, a financial advisor wants to generate attendees for their seminar. By offering a monetary incentive or by having the seminar at a nice restaurant and offering a free dinner, the number of attendees will be greater.

Incentives can also be used to generate a fast response. You can add a deadline or have a limited quantity offer. When using a limited quantity offer, it’s best to have a large number of these items to give away. If the number of giveaway items is small, you will give the perception that the recipient has little to no chance of receiving the freebie. The fast response incentives get people to respond on impulse which increases sales.

Lastly, incentives can be used to increase the size of an order. For example there is the classic “buy two and get the third one for free” offer. If you offer a service rather than a product, you can offer free service (“pay for 11 months and the 12th month is free”) in exchange for a longer commitment. It is our basic human nature to have a favorable response when receiving something for free. Incentives capitalize on our favorable emotions to generate greater sales.

Continue the Conversation: Call FNBR at 888-988-8148 or by email to info@fnbr.com.